‘Dance Moms’ Star Indicted on Bankruptcy Fraud Charges

In this May 13 file photo, Abby Lee Miller arrives at the 3rd Annual Reality TV Awards in Los Angeles. Ms. Miller has been charged with bankruptcy fraud after a judge discovered the possibility while channel-surfing.

Rich Fury/Associated Press

A Pennsylvania judge realized that bankruptcy fraud may have been unfolding in his own courtroom while channel-surfing.

The grand-jury indictment of “Dance Moms” star Abby Lee Miller, who is accused of hiding payments she got from her appearance on the reality TV show, traces back to a night in January 2013 when Judge Thomas Agresti came across Ms. Miller’s “Ultimate Dance Competition” on television, according to court papers.

Ms. Miller had filed for bankruptcy in December 2010, facing $356,466.52 in debt, according to documents filed in U.S. Bankruptcy Court in Pittsburgh. Her lawyers had said in early court papers that Ms. Miller had the potential to profit from the show, but money from those appearances wasn’t disclosed in the monthly reports that documented her income.

At one point in 2010, Ms. Miller told a court official that the reality show would bring in publicity “but no separate TV revenue,” according to court papers.

Ms. Miller told Judge Agresti that she could only afford to pay back a portion of the money she owes just a few weeks before the channel-surfing moment aired on television.

“I realized that there’s an awful lot of money coming into this plan—this case—and it hasn’t been disclosed,” said Judge Agresti said of that moment, according to a transcript of a Feb. 1, 2013, hearing.

Lawyers for Ms. Miller did not immediately return requests for comment.

Prior to the disclosure of the TV show money, Judge Agresti had scolded Ms. Miller for filing late court documents and for her courtroom behavior.

“Ma’am, be quiet. When I speak to you, you can talk. We’re not on a reality show. We’re in reality, but it’s not a TV show, okay, where you get to be the prima donna and the diva. You’re a debtor in this court and you’re going to observe the rules and responsibilities. Otherwise go ahead and go to Hollywood,” he said during an August 2011 hearing, according to a transcript.

Ms. Miller, 50 years old, was indicted by a federal grand jury in Pittsburgh on bankruptcy fraud charges which accused her of hiding $288,137.57 in TV show money she earned in 2012, according to the indictment.

Ms. Miller told Hollywood officials to withhold paychecks and to direct some of the money to her mother, according to the 20-count indictment that was returned by the grand jury on Tuesday. The indictment also accuses her of failing to disclose ticket sales to dance classes and apparel sold on AbbyLeeDanceCompany.com.

Ms. Miller wrote an email to her accountant with the subject line “LETS MAKE MONEY AND KEEP ME OUT OF JAIL,” according to the indictment.